Employees' Provident Funds and Miscellaneous

Provisions Act, 1952.

It extends to the whole of India except the State of Jammu and Kashmir
it applies
(a) to a factory engaged in any industry specified in Schedule I and in
which twenty or more persons are employed, and
(b) to any other establishment employing twenty or more persons or class
of such establishments which the Central Government may, by notification
in the Official Gazette, specify in this behalf:
Central Government may,apply this Act to any establishments employing
less than 20 persons by giving two months notice
In other cases if the employer and the majority of employees have agreed
that the provisions of this Act should be made applicable The Central PF
Commissioner may do so my notification in official gazette
Once applied it will continue even if the number of employees gets
reduced at a later date.
(persons employed in all branches and departments should be taken into
account to compute the twenty persons)
 Appropriate government

in relation to an establishment belonging to, or under the

control of, the Central Government or in relation to an
establishment connected with a railway company, a major port,
a mine or an oilfield or a controlled industry,or in relation to
an establishment having departments or branches in more than
one State, the Central Government
to any other establishment, the State Government
controlled industry" means any industry the control of which
by the Union government has been declared by a Central Act
to be expedient in the public interest
 Pay
'Pay' includes
•basic wages with
•dearness allowance,
•retaining allowance, (if any) and
•cash value of food concessions
admissible thereon
 "employee"
•"employee" means any person who is employed for wages
•in any kind of work, manual or otherwise,
•in or in connection with the work of an establishment, and
•who gets his wages directly or indirectly from the employer,
and includes any person
• (i) employed by or through a contractor in or in connection
with the work of the establishment;
• (ii) engaged as an apprentice, not being an apprentice
engaged under the Apprentices Act, 1961, or under the
standing orders of the establishment
•Drawing pay less than Rs.6500/- per month.
•Persons drawing a higher salary may join with the prior
consent of the employer
•Doe it cover managerial staff?
 5. Employees Provident Funds Scheme
ADMINISTRATION
•The Central Government may, by notification in the Official Gazette, frame a
Scheme to be called the Employees' Provident Funds Scheme
•It shall be administered by, the Central Board constituted under section 5A
•The Board shall have a Chairman and Vice Chairman appointed by the Central
government
•The Central PF Commissioner-Ex officio
•Upto five government officials appointed by central government
•Upto fifteen persons to represent the states appointed by the government
•Upto ten persons representing employers appointed by Central government after
consultation with employers associations
•Up to ten person representing employees appointed by the Central government
after consultation with employees associations.
•5AA. Executive Committee–by drawing members from Central Board
•5B. State Board – Constituted by the Central government in consultation with
the state government.
 5. Employees Provident Funds Scheme
ADMINISTRATION
•Non Exempted establishment
•The establishment to whom the Employees ' Provident Fund and
Miscellaneous Provisions Act 1952, is made applicable and compliance
in respect of their employees are made with the Regional Provident Fund
Commissioner, Set-up in respective region, and the returns, claims
for settlements, applications for withdrawals are processed through the
office of the regional Provident Fund Commissioner Exempted

•Exempted establishment
•Employer forms his own fund and obtains exemption from the PF
commissioner
•Forms his own trust, makes his own investment decision as per norms
•Settles the claims at his level
 5. Employees Provident Funds Scheme

How does the fund benefit the employees?

(i) Retirement
(ii) Medical Care
(iii) Housing
(iv) Family obligation
(v) Education of Children
(vi) Financing of Insurance Polices
 5. Employees Provident Funds Scheme
Rate of Contribution
How does the fund work?
employees and employer contribute at the rate of 12% of the pay every
month
The rate of contribution is 10% of the pay in the case of following
establishments:
Any establishment covered prior to 22.9.97 with less then 20
employees,
Any sick industrial company as defined in clause (O) of Sub-Section (1)
of Section 3 of the Sick Industrial Companies (Special Provisions) Act,
1985 and which has been declared as such by the Board for Industrial
and Financial Reconstruction,
Any establishment which has at the end of any financial year
accumulated losses equal to or exceeding its entire net worth and
Any establishment engaged in manufacturing of (a) jute (b) Breed (d)
coir and (e) Guar gum Industries.
 5. Employees Provident Funds Scheme

Employees' Provident Fund Interest rate

The rate of interest is fixed by the Central
Government in consultation with the Central Board of
trustees, Employees' Provident Fund every year
during March/April.
The interest is credited to the members account on
monthly running balance with effect from the last day
in each year.
What is the present rate of interest on PF?
 5. Employees Provident Funds Scheme
How to get the money?
Member can withdraw the full amount on
Superannuation
 retirement after 55 years of age
Termination of service on attaining the age of 55 years
Retired due to disablement ( no minimum service)
Migration to settle abroad permanently ( no minimum service)
Retrenchment ( no minimum service)
Where the establishment is transferred to another establishment
which is not covered under the Act ( no minimum service)
Discharge/dismissal (conditionally) ( no minimum service)
 5. Employees Provident Funds Scheme

Non refundable withdrawal for the following reasons

a) Purchase of Dwelling site.
b) Purchase of Dwelling House/Flat.
c) Construction of a house.
d) Repayment of Housing Loan to State Government Housing Board or
any other Government recognized Housing Finance Body.
e) Illness viz. Hospitalization for more than a month major surgical
operations or suffering from T.B., leprosy, paralysis, cancer, heart
ailment etc.
f) Marriage of Self/Son/Daughter/Sister/Brother.
g) Post Matriculation Education of Son/Daughter.
h) Damage to the property due to Natural Calamity (Flood/Earth
Quake).
 Conditions for withdrawal
1.   Purchase of site Minimum 5 yrs. 24 Months 1.  Certified true copy of
     for construction  of membership of wages (Basic Allotment
    of House. the Fund + D.A.)      Order (In case the
(Min. Balance in or Member's purchase is
member's a/c own share of      through an agency)
should be Rs. contr. with
1000/-) interest 2.  Certified true copy of
thereon, Title - Deed,
whichever is      if purchase is from an
less. individual.

3.  Certified true copy of

the
     Registered Agreement
with the
     Seller.
 Conditions for withdrawal
2.   Minimum 5 yrs. of 36 Months Same as per item (1) Certified
membership of the wages (Basic + true copy of the plan
Construction Fund D.A.) approved by the Collector's
of (Min. Balance in or Member's Office or Muncipal Corporation
     House member's a/c own share of or the local body as the case
should be Rs. contr. with may be.
1000/-) interest
thereon,
whichever is
less.
 Conditions for withdrawal
3) Purchase of Minimum 5 yrs. of 36 Months wages 1) Certified true copy of
    dwelling Flat / membership of the (Basic + D.A.) Allotment
    House. Fund or Member's own     Order(if purchase is through
(Min. Balance in share of contr.     agency)
member's a/c should with interest 2) Certified true copy of the
be Rs. 1000/-) thereon,      agreement with Seller, duty
whichever is less.      registered under the Indian
     Registration Act. 1908
3)  Non-encumbrance Certificate

     from the Solicitor

4)  Undertaking from the
member for
     not selling/transferring / 
     mortgaging the property for
next 
     5 yrs.
5)  Valuation certificate from 
     architect.
6)  Letter of expected date of
     completion of Building.
7)  Receipt of advance payment
     towards flat.
8)  If purchase is in a co-op Hsg
     society, then Registration No.
of
     the Society.
9)  Commencement certificate
 Conditions for withdrawal
4)Additions,  5 yrs. from the 12 months 1) Title of flat/house
   Alterations or date of completion basic + DA or 2) No objection letter from 
   Improvements of dwelling flat/ members qwn     Municipal
to  house. share of Corporation/Society.
   the dwelling contribution  3)  Architect letter stating the
flat /  with interest
   house. thereon,      approximate cost.
whichever is
less.
 Conditions for withdrawal
5) Advance from Minimum 10 yrs. 36 months A certificate from the Govt.
the Membership of the wages (Basic + lending authority furnishing
    fund for  fund and member DA) or Member's the details of loan and
    repayment of should have taken own share of outstanding amount.
loan. loan from a Govt contr. + Co's
body. share of contr.
with interest
thereon,
whichever is
less.
 Conditions for withdrawal

6) Advance from Stay in hospital at 6 months wages A certificate from the Medical
the least for a month. (Basic + DA) Practitioner for hospitalisation
    fund for illness or operation.
viz.
    Hospitalisation
for
    more than a 
    month, major 
    surgical   
    operation or
   suffering from 
   T.B.,Leprosy, 
   Paralysis,
Cancer, 
   Heart Ailment
etc.
 Conditions for withdrawal

7) Advance from 7 yrs. membership 50% of Marriage invitation card

the of the fund and member's own
    fund for min. balance in share of
marriage member's a/c contribution
    of Self  / Son / should be (Max. number
   Daughter / Rs. 1000/- of times
Sister / advance
   Brother etc. allowed : 3)
 Conditions for withdrawal

8) Advance from 7 yrs. membership 50% of Certificate from the Institution

the of the fund and min. member's own regarding the course of study
    fund for balance in share of and anticipated expenditure.
education member's a/c contribution
    of Son / should be (Max. number of
daughter Rs. 1000/- times advance
allowed : 3)
 Conditions for withdrawal

9) Grant of 1) Certificate of Rs 5000/- or Certificate from the

advance damage 50% of Appropriate Authority.
    in abnormal     from member's own
    condition. appropriate  share of cont.
Natural    authority (To apply
    calamities etc. 2) State Govt. within 4
declaration. months)
 EMPLOYEE'S DEPOSIT-LINKED
INSURANCE SCHEME 1976
APPLICABILITY : It is applicable to all establishments wherein
the EPF and Misc. Provisions. Act, 1952 is applicable.

ELIGIBILITY : All the employees contributing towards EPF

Scheme are eligible.

CONTRIBUTION : The contribution payable only by the

employer is 0.50 of pay (Basic + D.A. + Retaining Allowance if
any).
 EMPLOYEE'S DEPOSIT-LINKED
INSURANCE SCHEME 1976

CONTRIBUTIONS: Where the monthly pay exceeds Rs 6500/-, the total

contribution payable by the employer it shall be limited to
salary Rs. 6500/- only.

BENEFITS: In the event of death while in service of the member, the

nominees of the deceased shall in addition to PF/EPS accumulation, be
paid on amount equal to the average balance in the
fund, during the preceding one year, not exceeding Rs.
60,000/- (w.e.f. 01.06.2000) subject to the average
balance (both shares and interest) in the account of the
deceased not below Rs. 500/- during the preceding one
year or during the period of his membership, whichever
is less.
 Insurance benefit payable to whom?

To the person nominated to receive PF amount

In the absence of nomination- to all family members in equal share.
no share shall be payable to –
(a) sons who have attained majority;
(b) sons of a deceased son who have attained majority;
(c) married daughters whose husbands are alive;
(d) married daughters of a deceased son whose husbands are alive;
if there is any member of the family other than those specified in
clauses (a), (b), (c) and (d):
Provided further that the widow or widows, and the child or
children of a deceased son shall receive between them in equal parts only
the share which that son would have received if he had survived the
employee and had not attained the age of majority at the time of his
death.
 Insurance benefit payable to whom?

(3) In any case to which the provisions of sub-paragraphs 1 and 2 do not apply the
whole amount shall be payable to the person legally entitled to it.
(4) If a person who is eligible to receive assurance Scheme benefit of the deceased
member in terms of sub-paragraph 1,2 or 3 is charged with the offence of murdering the
member or for abetting in the commission of such an offence, his claim to receive assurance
benefit shall remain suspended till the conclusion of the criminal proceedings instituted
against him. If on the conclusion of the criminal proceedings, the person concerned is : -
(a) convicted for the murder or abetting the murder of the member, he shall be debarred
from receiving his share of deposit linked assurance benefit which shall be payable to other
eligible members of any of the family; or
(b) acquitted of the charge of murdering or abetting in the murder of the member, his
share shall be payable to him.
 6A. Employees' Pension Scheme
CONTRIBUTION
out of employer's share of Provident
Fund contributions(10 OR 12 % as the
case may be)
8.33% of the total pay limited to Rs.
6500/- per month is segregated and
credited to the Employees' Pension Fund
The Central Government would
contribute at the rate of 1.16 % of total
wages.
 Pension Benefits

Superannuation pension if retires on attaining the age of 58 years after

rendering at least 20 years of service
Retirement pension for exit before 58 years of age after rendering 20 years
of service
Short service pension for at least 10 years service but less than 20 years
service

Formula Pensionable salary X pensonable service

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70
 Monthly reduced pension
Monthly reduced pension before attaining the age of 58 years but after
completing 50 years of age
The amount of pension shall be reduced at the rate of 3% for every year
the age falls short of 58 years.
If the member had to leave service for any reason before superannuation he
may accept reduced pension if he is eligible or
Be issued a certificate of pensionable service
If he is employed subsequently his earlier service as per the certificate
shall be taken account for pension along with the new pensionable service
If not employed subsequently and dies before 58 years the amount of
contributions in account shall be converted into monthly widow/children/
orphan pension
Member who has not rendered adequate service to qualify for pension is
eligible to withdrawal benefit as prescribed in the scheme
 Permanent and total disablement pension

In case of permanent total disablement during the

service
If member has made at least one month’s
contribution
Eligible for monthly member’s pension
Subject to a minimum of Rs.250 rupees per month
This will be continued till the death.
No minimum service required
 Commutation of pension

Member has the option to commute upto 1/3 of the pension

To receive hundred times of the monthly pension so commuted as
commuted value of pension.

Example
Normal pension is Rs.600
Commuted 1/3
1/3X600X100= Rs.20000 payable at the time of exercising the option
Balance of pension payable every month is Rs.400
 13. Option for return of capital

A member may opt to draw a lesser pension and avail return of capital under
any of the following three schemes

Scheme 1.
Revised pension during life time of member with return of capital on his
death
Rate of pension: 90% of original monthly pension
Return of capital: 100 times of the original monthly pension on death of
member
to the nominee
 13. Option for return of capital
Scheme 2
Revised pension during life time of member
further reduced pension during life time of the widow or till her
remarriage, whichever is earlier and
return of capital on widow’s death/remarriage.
To the nominee
Rate of Pension:
90% of original monthly pension to the member.
On his death 80% of the original monthly pension to the widow
Return of capital:
90 times the original monthly pension on the death of widow/remarriage
to the nominee.
 13. Option for return of capital

Scheme 3.
Pension for a fixed period of 20 years notwithstanding whether the member
lives for that period or not
Rate of pension: 87.5 of the original monthly pension for a fixed period of
20 years.
The pension will cease thereafter
Return of capital: 100 times the original monthly pension at the end of 20
years from the date of commencement of pension
to the member if he is alive
otherwise to his nominee.
Options shall be exercised at the time of making application to the pension.
 16. Pension to family members on the death of a
member

Pension to the family members is allowed if

a member dies while in service and atleast one
month’s contribution has been paid or
A member exits from service dies before attaining
the age of 58 years but after rendering pensionable
service (before pension payment commences)
After commencement of payment of monthly
member's pension.
 Monthly Widow’s Pension

Where the member dies by leaving behind a widow

She will receive pension equal to members eligible
pension
It is payable up to the date of death of the widow or
till remarriage whichever is earlier.
If there are more than one widow it is payable to the
eldest surviving widow.
On her death it shall be payable to the next surviving
widow
Eldest means seniority with reference to the date of
marriage.
 Monthly children’s pension

If there are surviving children falling within the definition of

family
They would be entitled to monthly children pension in
addition to the monthly widow /widower pension
It shall be equal to 25 percent of the widow pension subject to
a minimum of Rs.150/-
It is payable till the child attains the age of 25 years
Admissible to maximum of two children run from the oldest
to the youngest child in that order
( In addition to this dependent disabled children if any will
receive children/orphan pension for the entire life)
 Monthly orphan pension
If a member dies leaving behind eligible
children with out a widow or
If the widow dies/remarries
children are entitled to monthly orphan
pension equal to 75 percent of the widow
pension subject to a minimum of Rs.250 per
month per child
Available up to two children at a time run
from oldest to youngest.
 Nominee’s pension

•Member not married or nor having living

spouse or eligible children
•May nominate a person to receive benefits
but on acquiring the family such nomination
becomes void
•In the event of death of the member without
family such nominee shall be entitled to
receive a monthly pension equal to the
monthly widow pension
 Pension to parents

•No spouse, no children no nominee

•In such case amount equal to widow pension shall be payable
to
•Either dependent father or dependant mother
•On the death of pension receiving parent the surviving parent
shall receive the pension for life
•( when the member has not completed pensionable service the
widow, children, nominee, parent is entitled to return of capital
)
 10. Protection against attachment

•shall not be liable to attachment under any

decree or order of any Court
• No official assignee appointed under the
Presidency Towns Insolvency Act, 1909, nor
any receiver appointed under the Provincial
Insolvency Act, 1920, shall be entitled to, or
have any claim on, any such amount
• these provisions are applicable to all the three
schemes under the PF Act
11. Priority of payment of contributions over
other debts
•Where any employer is adjudicated insolvent or,
•being a company, an order for winding up is made,
•the amount due from the employer under PF Act
•are to be paid in priority to all other debts in the distribution
of the property of the insolvent or
•the assets of the company being wound up, as the case may be
•Employer should not reduce wages of an employee to pay any
benefit/contribution under this Act.